NEW DELHI: Signature Global (India) is planning to launch 8-10 million sq ft residential projects in the next six months in Gurugram‘s sector 71, sector 84, sector 37-D and along Sohna road, said Pradeep Aggarwal, chairman and whole-time director of the company.
The company also signed a joint development agreement for 2.8 acre land parcel.
In sector 71, we will launch three million sq ft out of the 15 million sq ft development potential we have. Along Sohna road we have about 130 acres land parcel, where we will launch four million sq ft under Haryana Enterprises and Employment Policy-2020. We will launch about 0.8 million sq ft in sector 84 and 0.3 million sq ft in sector 37-D.
The property prices in the Sohna project will be around Rs 1-1.5 crore for mid-income and Rs 4-5 crore in sector 71 project for upper mid-income. In DRHP the company had informed that it had 5.75 million sq ft development potential in sector 71 which has now increased to 15 million sq ft.
The company has given the guidance to deliver projects worth Rs 11,000-12,000 crore by 2026. In the FY23, the company’s revenue was about Rs 1,535 crore and its posted loss after tax of Rs 63 crore. For the nine months ending December 31, 2023, the company achieved revenue of Rs 546 crore. Its profit after tax stood at Rs 2.17 crore in Q3 FY24.
The company delivered about 3,100 flats under lower mid-income (properties under Rs 1 crore) and 1,000 flats under upper mid-income (Rs 3-4 crore). In the next financial year, its focus will be more on upper mid-income segment.
“In the last financial year, most of the projects we delivered were in affordable housing hence the revenue number was higher. This year we are focussing more on mid-income and upper mid-income housing projects. So we expect to post profit by the end of this financial year.,” said Aggarwal.
The company gave the guidance of Rs 4,500 crore pre-sales target for the financial year 2023-24, which they now expect to cross and achieve somewhere between Rs 7,200 – Rs 7,500 crore by the March 2023-end. Based on the guidance of pre-sales of Rs 4,500 crore for FY24, the company was looking to achieve a target of Rs 6,000 crore in FY25 which it now has revised to achieve Rs 9,500 crore.
“We always prefer to give guidance which are realistic. Real estate is such a volatile industry that we must consider all the possible scenarios before deciding on final target figures. Apart from this we also said that we would be looking to grow anywhere between 25-30 per cent year-on-year. We will continue to achieve similar growth in coming financial year as well,” said Aggarwal.
There were some projects which the company was looking to launch in March 2024 which it has now pushed to the April-June 2024 quarter of FY25. As for the reason for the postponment, he said, “we recently sold the inventory, we cannot bring in bulk inventory in the market. We had announced that we will be carrying out project launches worth Rs 8,500 crore which has all been sold out, hence we are looking at launching new projects in the next quarter now.”
In this financial year, the company is looking at an average ticket size of Rs 1.75 crore, which translates to Rs 10,500 per sq ft up from the average price realisation of Rs 7,500 per sq ft it achieved in the last financial year. It is expecting a 10 per cent increase in average price realisation to about Rs 11,500 – Rs 12,000 per sq ft in FY25.
Changing tactics
A company needs to improvise based on the marketing condition and buyers’ demand. If we had stayed only in the affordable housing segment, we would not have survived because developing an affordable housing is no longer viable with the increased land and construction cost.
According to him, although the land prices have increased in the last few years, they are still reasonably controlled. At the same time product pricing has also increased over the same time which is allowing builders to make profit.
Earlier the company had fragmented land parcels spread all across Gurugram. Now it has changed its strategy and are consolidating its presence in few regions. In sector 71, it has about 90 acres land parcel while along Sohna road it has about 135 acres land parcel.
Till date the company was carrying out in-house construction but now in order to compete with other companies and to create a marquee product, it plans to employ engineering procurement and construction (EPCs) companies. “We can recover this from the right product pricing,” said Aggarwal.
The company however is not looking to expand in other geographies. “We have upcoming projects of 31 million sq ft, so currently we are only focussing in Gurugram,” said Aggarwal.
Choosing home buyers
The company recently launched residential development project: DE LUXE-DXP in Sector 37D, Gurugram. Spread over 16.5 acres, this project presents a sales potential of 2.7 million sq ft and the company claims to have achieved pre-sales of Rs 3,600 crore. It plans to invest about Rs 2,200 crore in the project over the next 4-5 years time. It launched the project at an average price of Rs 13,000 per sq ft.
Interestingly, it received expression of interests which were 5.5 times the flats available. The company onboarded Boston Consulting Group which helped create the whole process online, gather data of home buyers and reviewed the application and profiles using several matrix including social media. This helped them identify and select the buyers. About 30 per cent of the buyers were NRIs or from big corporate and 20-25 per cent were investors.
Signatureglobal Business Park
In a recent regulatory filing, the board of directors of the company with a view to comply with the requirement of minimum paid up capital of Rs 35 crore of Signatureglobal Business Park (SBPPL), a wholly-owned subsidiary, has approved the investment of Rs 29.90 crore in the 2.99 crore equity shares of Rs 10 each of SBPPL for cash at par.
SBPPL has received LOI from directorate of town & country planning (DTCP), Haryana for setting up a project over an area of 128.69 acres and as stipulated by one of the conditions by DTCP, SBBPL has to ensure to have a minimum paid up capital of Rs. 35 crore.
